When searching for personal finance advice, people never think about the impact of their own education, lifestyle, or upbringing on their search.

They look for personal finance spreadsheets, home budget worksheets, programs that offer personal finance in excel or they seek help from experts who have created a personal finance career.

Generally, people look outside themselves for answers in managing money, yet a major characteristic of the wealthy and the happy is their self awareness, a trait embedded in their childhood. They didn’t get mugged by the marshmallow!

Self Awareness: Why “Leaving The Marshmallow’ Is Important

Dr Walter Mischel conducted a famous experiment with a group of children and marshmallows. In the experiment he offered young children a choice between a marshmallow resting on the table in front of them, which they could eat now – or two marshmallows if they waited for him to come back into the room. Then he left and observed the kids.

He then tracked the success of the same children in later life and concluded that those who waited, were much more successful as a group, than those who didn’t. Those who waited and delayed their gratification had a higher level of self awareness, understanding the investment they were making by waiting, which means that in matters of personal finance budget management and financial planning, the ability to know oneself, and having self control is a core part of building wealth.

Self Awareness: Why Happy People See Success Everywhere

Happy people are self aware – they know the impact and influence they project onto others and can adjust their behaviour accordingly. Having emotional self awareness is to understand your feelings, what causes them and how they impact your thoughts and actions.

People with this competency understand how their needs impact their relationships with others, know their own values, and try to maintain a focus on what they consider to be most important. They resist the pressure to put on a false mask of success by projecting trappings of wealth as symbols of achievement.

Self Awareness: How To Negotiate Successfully In Any Situation

A critical benefit of self awareness is to anticipate your own reactions and extend a sensory acuity onto your negotiating opponent. Successful negotiation, in matters of personal finance and life in general is a matter of seeking a mutual win, rather than an outright victory so by ‘sensing’ when to agree and when to back off thus making much better decisions in the moment.

So to successfully negotiate in any situation, simply prepare in advance with the following 7 questions.

How often do I change my approach to things?

When was the last time I experimented with something new?

How important is it for me to fit in

When did I last notice something about someone else while ‘people watching’?

Who do I look up to most in life?

Do I think that giving in is a sign of weakness or a hidden strength?

Do people think I always stay true to myself, no matter what?

Money happy people understand that all the money coming in must be given a job to do, either in enriching life or growing assets. These assets can be children, property, relationships, as well as the more conventional financial services products.

Self Awareness on its own though is limited in the power to ensure financial success and wealth, it is only one of the 6 critical wealth skills, yet when combined in a simple system of personal finance budget software online, is one of the strongest.

A personal finance budget is extremely important when it comes to your finances. Having a budget will allow you to manage your investments, your savings, and handle all of your bills in an effective manner.

Start the process by writing out all of your expenses. Then track your spending for at least a month, this includes not just your bills but your savings as well.

At the end of the month use the list of your expenses to categorize them either as needs or as wants. Please understand the basic difference here. A need is essential to your survival like food, shelter, clothes, heat. (it’s unlikely that you would survive for long without food, heat or shelter so money allocated to rent, work clothes, heating oil, are needs-you can extend this to things like transportation as you would not be able to get to work to earn income otherwise (unless you telecommute of course).

A want consists of something not absolutely necessary, but that you desire. Examples would be an iPhone, a gym membership or a pedicure, which you do not need to survive.

Then take a look at your wants list and eliminate the most superfluous. Of what’s left, if there is anything that you can save money on, think of alternatives..For instance, instead of getting your car professionally detailed, save money by getting it washed for 5 dollars by a kid on the block.

Examine your needs as well to see where there may be some saving opportunities. Then proceed to categorize them between fixed and flexible expenses. Your fixed expenses are the same every month, things like health insurance would be classified that way. Flexible ones like your groceries can vary every month.

Take your personal finance budget to the next level. Classify your expenses by due date, for instance, the rent bill should be reflected on the first of the month and if for instance a credit card payment is due on the 5th, it might be next on your chronological budget.

Continue classifying them by weeks, some will be constant (will appear every week- like groceries and gas for the car) and some will be periodic (once in a while- like scheduled car maintenance, heating oil charges or water and sewer charges.) Add up all your weekly expenses to see what cash outlay to anticipate. Total all four weeks and compare to your actual take home salary. Based on that, make sure you put enough in weekly savings to meet those bills when they come due.

If your expenses are greater than your income, take another look at your list and eliminate any “wants” items and re-examine your “needs” to see how you can save money. Call your credit card company to see if you can renegotiate a lower rate or switch to a cheaper prepaid cell phone plan.

Reprogram your house thermostat for lower settings- wear a sweater during the week-end and in the evening if need be. If you are still short, then it’s time to consider getting a second or part time job to supplement your income and meet your obligations.

From now on your personal finance budget will revolve around your needs rather than your wants. You only spend money on wants if you have extra at the end of the month and even then you should try to apply it to any form of debt you may have or to shore up your savings and investments.

If you find yourself in the happy position of having a surplus income over your expenses, establish some goals like a vacation fund or new house fund.

Monitoring your actual income/expenses against your personal finance budget is not a onetime thing, it should be done monthly to catch trends and make course corrections. Saving a dollar here and a dollar there can add up to serious money in the aggregate.

In creating a personal finance budget, remember to make it a priority to establish an emergency fund if it is not already in existence. A rule of thumb is 6 months worth of expenses but in this economy 9 months to a year is closer to what’s wise in my estimation.

Presuming you make $4,000 a month you would need to save $24,000 for the minimum of 6 months. If you make $1000 a month you would need to save $12,000 for the maximum yearly guideline. Do this before you spend $10,000 for a trip to Europe or buy that fancy motorcycle you only use a few times in the Summer.

By making a personal finance budget and sticking to it you can make yourself financially healthy. You can make a goal of buying that car you have always wanted, get out of debt and even retire early.